Foreign Currency Convertible Bond

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Foreign Currency Convertible Bond

A convertible bond that is issued in a currency other than the issuer's own. A company may issue an FCCB if it intends to make a large investment in a country using that foreign currency. For example, when an American company issues a convertible bond in euros because it intends to build a factory in Germany, this is a foreign currency convertible bond. Like all convertible bonds, an FSSB is a bond that a bondholder may exchange, at a certain price, for common stock in the company issuing the bond. The number of shares one receives for each bond and the price one pays for those shares are determined when the convertible bond is issued. This allows bondholders to take advantage of both the low risk of a bond and the potential price appreciation of the underlying stock. The FCCB also reduces the foreign exchange risk for the issuer.
References in periodicals archive ?
Indian wind turbine maker Suzlon Energy Ltd has $389 million of FCCBs maturing in 2012 in four separate tranches.
5 million in FCCBs maturing in two tranches in June, while 3i Infotech has a total of $86.
With this repayment of FCCBs and the pre payment of its Indian Rupee Debt in April 2010, there is a substantial improvement in the financial ratios with a very low average interest cost of 4.
NOIDA, Uttar Pradesh, India -- Jubilant Organosys Limited, an integrated pharmaceutical industry player and the largest Custom Research and Manufacturing Services Company out of India, today announced the repayment of FCCBs amounting to US$ 50 million along with the YTM of US$ 19 million.
The company has issued 6000 FCCBs of $10,000 each, to be listed on the Singapore Stock Exchange.
The ED has also asked both Reliance Media Works Limited officials to provide details of the shareholding pattern of the company, besides information on the inflow and outflow of FCCB proceeds from the company's bank account.
The Pune- based firm has another FCCB of $ 209 million that will come up for redemption in October.
The FCCB is the longest tenor convertible issuance out of India and the proceeds are to be mainly utilized to refund "certain outstanding obligations of GMR and its subsidiaries".
EMI measurements have demonstrated significant margin to FCCB specifications, so designers can feel confident of passing regulatory EMI system testing.
Ross & Company and Istithmar on conversion of FCCBs.
The company paid the first tranche of FCCBs of $4,360 million in July of 2012.